Malaysian tin fell almost 2 percent on Wednesday, reaching a rare parity with the price in London, after both markets underwent a technical correction. The spot price on the Kuala Lumpur Tin Market dipped $155 to $8,050 a tonne. The traded volume dwindled to 80 tonnes from 146 tonnes the previous day. Tin on the London Metal Exchange fell $150 on Tuesday to also close at $8,050 a tonne. The London price often lends direction to the market in Kuala Lumpur. Despite Wednesday's sharp correction, dealers said the price could stay above $8,000.
"The stock situation of tin is better now than a few months back, but the dynamics could change anytime," said a trader.
Tin stocks on the London Metal Exchange stood at 5,325 tonnes on Tuesday, up from about 3,500 tonnes seen in January. In Wednesday's market, initial offers for Malaysian tin stood at 123 tonnes, against bids of 17 tonnes from Japanese and local buyers.
The $5 difference in the closing price of the two markets narrowed accordingly the premium for a tonne of Malaysian tin destined for European markets.
The premium, calculated using freight, insurance and other financial costs, was down to $220 a tonne on Wednesday compared with Tuesday's rate of $225.
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